The latest rates side by side
The National Credit Union Administration (NCUA) publishes national average rates for credit unions and banks. In its latest edition, covering rates as of December 26, 2025, credit unions charged less on every product it tracks:
| Loan type | Credit unions | Banks |
|---|---|---|
| Unsecured fixed-rate loan, 36 months | 10.64% | 12.00% |
| Credit card, classic | 12.58% | 15.27% |
| New car loan, 60 months | 5.44% | 7.41% |
| Used car loan, 48 months | 5.53% | 7.73% |
| Home equity loan, 5 years | 6.63% | 7.31% |
| Home equity line of credit | 7.13% | 7.74% |
These are averages of posted rates. Your own rate depends on your credit, income and the lender.
What the gap saves you
On a personal loan, the 1.36-point difference adds up to real money, though not a fortune on smaller balances. Here’s what 36-month loans cost at each average rate:
| Amount | Credit union payment | Bank payment | Interest saved |
|---|---|---|---|
| $1,000 | $32.57 | $33.21 | $23.25 |
| $3,000 | $97.71 | $99.64 | $69.75 |
| $5,000 | $162.84 | $166.07 | $116.25 |
Fixed rate, no fees, on-time payments. Because a fee can outweigh a small rate gap, always compare the APR, which includes fees.
Why credit unions often charge less
Credit unions are member-owned, not-for-profit cooperatives. Instead of paying shareholders, they can return earnings to members through lower loan rates, higher savings rates and lower fees. Deposits at federally insured credit unions are protected by the NCUA up to $250,000, the same standard limit the FDIC provides at banks.
How to join a credit union
Every credit union has a “field of membership,” the group of people it serves. It might be based on:
- Where you live or work, such as a county or city.
- Your employer or industry, including government agencies and large companies.
- Family ties, since relatives of members can often join.
- An association, where joining a partner group or nonprofit, sometimes for a small fee, makes you eligible.
To join, you usually open a savings account with a small deposit. The NCUA runs a locator on MyCreditUnion.gov to help you find federally insured credit unions near you. If you need a loan soon, ask whether the credit union has a waiting period before members can borrow.
Payday alternative loans for small amounts
Federal credit unions can also offer payday alternative loans (PALs), built for small, short-term needs:
- PAL I: $200 to $1,000, repaid over 1 to 6 months. You must be a member for at least one month.
- PAL II: up to $2,000, repaid over 1 to 12 months, with no waiting period.
- Both: APR capped at 28% and an application fee of up to $20.
A $1,000 PAL at 28% over 6 months costs $180.54 a month and $83.24 in interest, far less than renewing a payday loan. More in our credit unions vs. banks guide.
Credit union, bank or online lender?
| Credit union | Bank | Online lender | |
|---|---|---|---|
| Average 36-month rate | 10.64% (NCUA) | 12.00% (NCUA) | Wide range by credit |
| Who can borrow | Members only | Often customers first | Anyone who qualifies |
| Small loans | PALs from $200 | Often $1,000+ minimums | Varies; some start low |
| Speed | Varies | Varies | Often a few business days |
| Fees | Often low | Varies | Some charge origination fees |
Credit unions tend to win on price, online lenders on speed and access, and banks on convenience for existing customers. Whichever you choose, ask each lender for the APR and total repayment, and read our guide to how fees change your APR.
Questions to ask any lender
- What’s the APR, and does it include an origination fee?
- How much will I actually receive, and when?
- Is the rate fixed for the whole loan?
- Is there a penalty for paying early?
- Do you check credit with a soft or hard inquiry before showing my rate?
When a bank or online lender wins
- You can’t join quickly. Credit unions require membership, usually tied to where you live, work, worship or study. Some PALs need a month of membership.
- You need money fast. Many online lenders fund within a few business days of approval.
- You want to compare broadly. One request through a marketplace can show offers from several lenders at once.
- You already bank there. Some banks offer rate discounts to existing customers or for autopay.
Shop both. Check your credit union’s rates, then compare offers for $200–$5,000 from lenders in our network. Apply now and line them up by APR.
Frequently asked questions
Are credit union personal loans always cheaper?
On average, yes: 10.64% versus 12.00% at banks for a 36-month unsecured loan in NCUA’s latest survey. Your own offer depends on your credit, so compare APRs.
Can anyone join a credit union?
Membership is based on a common bond, such as where you live, work or study, or belonging to a group. Many credit unions have broad eligibility.
Is my money safe at a credit union?
Deposits at federally insured credit unions are insured by the NCUA up to $250,000, comparable to FDIC insurance at banks.
What is a payday alternative loan?
A small loan from a federal credit union: up to $1,000 (PAL I) or $2,000 (PAL II), with APR capped at 28% and an application fee of up to $20.
- NCUA, Credit Union and Bank Rates, 2025 Q4
- MyCreditUnion.gov (NCUA), Your insured funds
- LendingTree, Payday alternative loans
- Payment and savings figures calculated by Riverstone using standard amortization.
This article is general information, not financial advice. Rates and rules change; check the linked sources for the latest figures.